New Virgin airline in talks with Phila. about HQ
Virgin Group -- the $5 billion British conglomerate that operates Virgin Atlantic Airways -- is in talks with Philadelphia and Pennsylvania officials about locating the headquarters for a new low-cost airline in the city.
Economic development officials are pitching the Philadelphia Naval Business Center -- the former Navy Yard -- as the headquarters location for the new airline, which is going to be called Virgin USA, said Elinor Haider, an assistant vice president with the Philadelphia Industrial Development Corp. Virgin USA could provide hundreds of jobs for Philadelphia, and it would also provide flights in and out of Philadelphia International Airport and other major airports, she said.
Other major cities on both coasts are competing against Philadelphia for the headquarters location. Haider wouldn't reveal the names of those cities, but an Oct. 6 story in the San Francisco Business Times, a sister publication of the Philadelphia Business Journal, said that Philadelphia is competing against San Francisco; New York; Washington, D.C.; Boston and Los Angeles for Virgin USA's headquarters and 500 jobs that would go with it.
Haider couldn't confirm that number, but she believes it would initially be more like the "low 100s" and then it would grow larger as the new venture grows.
PIDC, the city's Department of Commerce, the Governor's Action Team and the airport are involved in the discussions. The Governor's Action Team is a group of state economic development specialists that report directly to Gov. Ed Rendell. The PIDC is a private, nonprofit organization that acts as the city's economic-development arm. It typically works in concert with the city's Commerce Department on deals. City Commerce Director James Cuorato could not be reached for comment.
Haider says the new airline, which is still being formed, is working out of offices in New York. But she said the city and state have had "initial discussions" with Virgin about putting its headquarters in Philadelphia, and Virgin officials toured the former Navy Yard in August. A decision is expected within several months, she said.
Haider says she believes Philadelphia has an advantage over other cities because the PIDC owns the real estate it is pitching to Virgin and the site is close to the airport, which the city also owns. In addition, the cost of living is cheaper in Philadelphia than in other cities, she said, and that is important to the types of employees that Virgin USA would need to hire, including pilots, flight attendants and reservations personnel.
"It's really an ideal location for them," Haider said. "I feel very enthusiastic about it."
Virgin officials in New York who are fielding calls about Virgin USA did not immediately return calls seeking comment. Kim McFadden, regional director of the Governor's Action Team, said she could not comment.
Philadelphia International Airport spokesman Mark Pesce confirmed that airport officials are also working on the deal as it relates to service in and out of Philadelphia International.
If Virgin USA were to decide to run service out of Philadelphia International, it would be the second high-profile, low-cost airline to chose Philadelphia recently. In late October, Southwest Airlines Inc. announced it would start service out of Philadelphia in 2004. The move is expected to drive down prices and put pressure of US Airways Group Inc., which has a hub in Philadelphia.